CurrencyFair's MarketPlace Explained

CurrencyFair's MarketPlace Explained

How The CurrencyFair Marketplace Works

Why Use The Exchange?

Our goal here at CurrencyFair is to save you money on every currency exchange that you do. We do this by matching your funds with other customers like you who are looking to exchange in the opposite direction.


If you are in a hurry you can use our "Create an Auto-Transaction" feature, which will exchange your funds immediately at the best rate currently available on our system – on average 0.4% of the interbank rate.

If you do not require your money to be exchanged instantly, you can use the Exchange to try and get a slightly better exchange rate than is currently available via the Create an Auto-Transaction option.

You are not guaranteed to get a better rate, that all depends on how aggressively you choose your exchange rate, but you can always change your mind at any time and Create an Auto-Transaction exchange your money instantly.


In this post we will explain the benefits of using the Exchange, how it works and how to give yourself the best chance of exchanging your money at a better rate. We've previously discussed how to beat the interbank rate - and as you can see below, around 20% of CurrencyFair customers who use the Exchange end up with rates better than the quoted interbank.


Overview Of The Exchange

What is the Exchange? Simply put, the Exchange is CurrencyFair.

The Exchange = CurrencyFair

CurrencyFair is a marketplace for currency exchange, and the Exchange is where all of the money currently within CurrencyFair is and where every exchange takes place.

"Create an Auto-Transaction" trades take place on the Exchange!

A quick look at the image below and you will see the Exchange in action.

In the centre of the screen you will see a line highlighted in blue with the tag, "Best Available Now", this is the best rate you can get on our system if you were to exchange your funds right now.


Quick Note: This is the rate you would get if you use the "Auto-Transaction" exchange option, it is also the rate that is quoted when you use the calculator on our homepage.  If you were to Create an Auto-Transaction, our system would match your money off with the funds available on the Exchange at the best available rate (dark blue), if there is not enough money available at the best available rate, it will take all of that money and then as much as necessary from the next best available rate, and so on.


For example, on the Exchange below, if you were to exchange £2000 to euros at this moment, you would get it at the rate of 1.3629, giving you €2725.80

However, if you wanted to "Auto-Transaction" £3000 to euros, there would not be enough money at the best available rate to satisfy this exchange, so you would exchange £2,187.72 at 1.3629, giving you €2981.64, and the rest of the £3000 (£812,28) would be matched at the next best available rate, which is 1.3627, giving you €1106.89 for a total exchange of £3000 >> €4088.53. The overall rate for this exchange would be 1.362843.


When using the rate calculator on our homepage this is worked out automatically and instantly by our system.

The Exchange is essentially a queue for a better rate.


In the example below you will see we are looking at the GBP>EUR Exchange, the different rates and sums listed above the "Best Available Now" line are other CurrencyFair customers looking to achieve a better rate the same as us.


Once you place an order you will be entered into that queue and your funds will automatically be exchanged if/when the market moves in your favour.

  1. marketplace-explained1. Here is where the send currency is selected.

    2. If you have a certain amount of money that you want to send, enter that figure here.

    3. If you have a certain amount of money that you want to receive, enter that figure here.

    4. Here is where the receive currency is selected.

    5. The rate can be adjusted here, prior to placing the order.

    6. This shows your available funds in each currency of the Exchange you are viewing.

    7. You can save your most used markets to allow for easy access.

    8. See 1.

    9. Pressing this button will show the opposite currency pairing, for example, clicking the button in the picture above would switch the market from GBP>>EUR to EUR>>GBP.

    10. This either shows “+” or “-“. It is used to add/remove a market from your saved markets (see 7).

    11. This button refreshes the Exchange (the Exchange will automatically update itself periodically as well).

    12. See 4.

    13. This is the Exchange, where all the money for the GBP/EUR market is. The money from "Best Available Now" down (inclusive) (the lines in blue), is all of the euros currently on the GBP/EUR market. The money from "Better Requested" up (inclusive) (the lines in orange), is all of the pounds currently on the GBP/EUR market. If you were to press the button in 9. so that you were looking at the Exchange for EUR>>GBP instead, all of these amounts would flip over, so the "Better Requested" pounds would now be shown on the EUR>>GBP Exchange as the "Best Available Now" euros, etc.

    14. Clicking on this button expands the market to show all available funds.

    15. Here you can view all of your orders that are currently on the Exchange, and also any recent orders.


Placing An Order On The Exchange

 Example 1: Have A Specific Amount Of Money To Send?


In this example the sender wants to exchange €1000 to pounds.

Using the Exchange, they enter the amount in the "I have" box. They then can select the rate they would like by either using the rate select box on the left-hand side, or clicking on a rate on the Exchange.


They choose to put their €1000 on the market at a rate of 0.7277. This money will stay on the Exchange at this rate until it is matched or the person decides to change the rate or remove the money from the Exchange. By altering the chosen rate, the sender would always be sending the same amount of euros, but the potential amount of pounds to receive would change. For this person's money to be matched, all the euros that are on the EUR>GBP Exchange at a lower rate than it will have to be matched first.


This is all of the money below it on the image above, each line down to "Better Requested" (inclusive). That is €246,591.35 at 0.7261, €295,500.00 at 0.7269 and €200,000.00 at 0.7273, totalling €742,091.35. This means that for this exchange to happen, people exchanging GBP>>EUR would need to match off against €742,091.35 for this person's exchange to happen, and that's not including when other people add their euros to the Exchange at a lower rate.


Example 2: Have A Specific Amount Of Money To Receive?


In this example the sender has euros, but wants to receive exactly £1000 after the exchange.

This time they enter the amount in the "I want" box, and select a rate of 0.8325.

The money goes onto the Exchange, and will be matched if all of the euros on the EUR>>GBP Exchange at lower rates have been matched, as explained above in Example 1.

If the sender alters the rate they want here, the receive amount will remain the same, but the send amount will increase or decrease.


Example 3: Placing Multiple Orders On The Exchange


This is useful if you want to try and get a better rate than is currently available on the Exchange, but you are also under a slight time-constraint.

Here, the sender wants to exchange €600 to pounds at a better rate than is available.

They place three orders on the Exchange of €200 at 0.7256, 0.7257 and 0.7263 with the hope that if not all of their money is matched at better than the current best available rate, at least some of it will be.

If not all of their money is exchanged by the time they need to transfer out, they can easily drop the rate to the "Best Available Now" and exchange instantly (effectively doing a manual Auto-Transaction).


Tips For Getting The Most Out Of The Exchange

At the beginning of this article we mentioned that although by using the Exchange, you can get better rates than by just choosing Auto-Transaction, you are not guaranteed to get a better rate, as you are not guaranteed to get matched. This all depends on how aggressively you pick your exchange rates.


In this section we will explain how you can give yourself the best possible chance of matching at a higher rate and even beating the interbank rate! (The interbank rate is the market midpoint).

AUD-EUR MarketPlace

The interbank rate at this time was 0.6638


Tips For Getting The Most Out Of The Currency Exchange Marketplace

1. Don't aim too high.

Using the above Exchange, if you were wanting to exchange AUD to EUR and you put your funds onto the Exchange at 0.6654, it is very unlikely that it would get matched. It would need AUD 440,957.67 to be matched before your money was exchanged, and this isn't even including any funds that other customers would be adding to the Exchange in the meantime. If you were to put your money on the Exchange at 0.6639 it would be the first money to get matched if anyone was to "Create an Auto-Transaction" EUR to AUD, and it would be at a better rate than interbank. This means that you effectively pay no commission on your exchange and actually make money on it!


2. Track the interbank rate in a separate tab of your browser.

The interbank rate is not static. If you want to make sure that your exchange is better than the interbank rate when it happens, you need to keep an eye on the rate as it fluctuates, and adjust your request accordingly. This does not guarantee you to beat the interbank rate, you still need someone to exchange with your funds, but it does guarantee that when/if your money is exchanged, it will be at a better rate than the interbank.


3. Aim for just below any large amounts of money currently on the Exchange.

The best way to beat the interbank quickly is by watching the Exchange and putting your money on at 0.0001 below the first big sum of money. On the above Exchange, if you were to put your money on there at 0.6645, it would give it a good chance of matching, as there would only need to be AUD 8,283.82 exchanged before your money was matched, and it would be at 0.0007 above the current interbank rate. If using this method to get a "quick" Exchange exchange, it is necessary to keep an eye on the Exchange as people are constantly increasing and decreasing the rates that they have requested. One minute you could be 0.0001 under a large sum of money, the next you could be 0.0001 over it, meaning it is a lot less likely that you will get matched.



If you have any questions about the Exchange, please put them in the comments below, or if you have any handy tips you'd like to share those would be much appreciated too!